Hyderabad-based Dr. Reddy’s Laboratories has received a warning letter from the US Food and Drug Administration wherein the drug regulator has sighted its observations for the company’s three facilities, the pharma major informed the Bombay Stock Exchange on Friday.
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Shares of Dr. Reddy’s dropped as much as 14.5% and were trading 13.5% lower at Rs.3,680.60 on BSE at 11:59am, while the benchmark Sensex rose 0.05% to 26,317.69 points.
The warning letter means Dr Reddy’s will not receive FDA approvals to sell drugs manufactured at the plants for now, a blow for business at a company which relies on the United States for a majority of its sales.
He also said that Dr Reddy’s Lab will get back to USFDA on action plant of plants under observatioon. An FDA inspection previous year of the company’s Srikakulam plant, where it was going to manufacture the bulk ingredient for the product, found manufacturing issues the company has been working on resolving.
The FDA has already banned plants of other Indian firms, such as Wockhardt Ltd and Ranbaxy Laboratories Ltd, a unit of the country’s largest drugmaker Sun Pharmaceutical Industries Ltd, after finding faulty, fudged or incomplete data records in recent years.
The company hopes for a re-audit of the three plants by USFDA once the observations made by it are rectified or fulfilled, said DRL President, CFO and Global Head of HR, Saumen Chakraborty. “We will continue to actively engage with the agency to resolve these issues and we have also embarked on an initiative to revamp our quality systems and processes, as an organisation-wide priority”.
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The latest development comes following the earlier the drug regulator’s earlier inspection of these sites in November 2014 and January & February 2015, the release said.
